Oil Closes Below $58 as Esper Seeks to Cool U.S.-Iran Tension - Bloomberg

Oil Closes Below $58 as Esper Seeks to Cool U.S.-Iran Tension - Bloomberg:

Oil closed slightly lower as taunts and threats between the leaders of the U.S. and Iran failed to sustain a rally.

Futures in New York closed just below $58 a barrel on Tuesday, after acting Secretary of Defense Mark Esper said the U.S. isn’t looking to go to war with Iran. Prices had surged higher earlier after Iran said new American sanctions had shut the door to diplomacy “forever” and President Donald Trump warned that any attack on U.S. assets could be met, in some areas, with “obliteration.”

Prices flipped between gains and losses several times during a choppy trading session that also brought reminders of the fragile economic outlook. Federal Reserve Chairman Jerome Powell warned the risks to the economy have increased and Trump administration officials signaled a trade deal at the Group of 20 summit this week is unlikely.

“Oil squeezed higher last week on tensions in the Middle East, but with so much uncertainty regarding the trade war and global economy, the demand argument is too shaky for a sustainable rally just yet,” Tyler Richey, co-editor at Sevens Report Research in Palm Beach Gardens, Florida, wrote in a note to clients.

West Texas Intermediate for August delivery fell 7 cents to $57.83 on the New York Mercantile Exchange, after closing Monday at the highest point since May 29. Brent for August settlement rose 19 cents, or 0.3%, to $65.05 a barrel on London’s ICE Futures Europe Exchange.